Olivera Corporation's Flexible Budget Performance Report for Last Month Shows

Multiple Choice

Olivera Corporation's flexible budget performance report for last month shows that actual indirect materials cost, a variable cost, was $31,178 and that the spending variance for indirect materials cost was $2,261 unfavorable. During that month, the company worked 11,900 machine-hours. Budgeted activity for the month had been 12,200 machine-hours. The cost formula per machine-hour for indirect materials cost must have been closest to:

A) $2.74
B) $2.81
C) $2.37
D) $2.43